Coinbase, a prominent worldwide cryptocurrency exchange, intends to provide a solution exclusively for Australia’s self-managed pensions sector.
Although incorporating cryptocurrencies into the pensions sector, particularly self-managed super funds [SMSFs], has been around for a while, there has been a significant increase in the incorporation of cryptocurrency assets in Australian SMSFs since March 2019. John O’Loghlen, the firm’s Asia-Pacific Managing Director, provided insight on this development.
According to the latest numbers from Australia’s Taxation Office, approximately 1 billion Australian dollars have been invested in cryptocurrencies within these funds. This represents a significant increase from 197 Australian dollars in December 2019.
However, the volatility and risks associated with cryptocurrency have caused substantial losses for some investors. According to a Reuters article from March 2023, thousands of Australians with SMSFs who invested in cryptocurrency lost millions of dollars.
Coinbase to Develop Specialized Service
Coinbase is creating a unique solution for SMSF investors to meet this growing demand. The firm said that these funds frequently make a single, long-term investment, emphasizing the necessity for a solution that facilitates this investing strategy. O’Loghlen stated,
“Self-managed super funds may make a single allocation, set it, and forget it. We are developing a one-time offering to provide exceptional service to those clients so that they will trade with us and stay with us.
The growing interest in cryptocurrencies among SMSF investors can be attributed to the overall pace of the crypto sector. This comes after recent spot ETF approvals in the United States. This trend will likely continue, with comparable approvals in Australia this year. However, O’Loghlen stated that Coinbase does not view this project as competing with ETF providers. Instead, it wants to capitalize on the growing interest in Bitcoin investments.